How Ayn Rand's ideas can end Big Government

From bankruptcy and serfdom to a society that is free, prosperous and moral

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Last week Dr. Yaron Brook, executive director of the Ayn Rand institute, gave several presentations in England including an event at the Adam Smith Institute. Dr. Brook had been touring Europe promoting the ideas of the novelist and philosopher Ayn Rand and his new book, co-authored with Don Watkins, 'Free Market Revolution: How Ayn Rand's Ideas Can End Big Government'.

Since the financial crisis began in 2008 there has been much commentary about a crisis of capitalism and how now is the time for governments to step in and regulate previously unregulated financial markets which were the cause of the crash. This has been the mainstream narrative.

But the charge that before the crash financial markets were unregulated is patently absurd. If we look at the United States it is the areas that were the most heavily regulated, housing and financial services, in which the collapse took place.

Between the Federal Reserve, Sarbanes Oxley, Fannie Mae and Freddie Mac, deposit insurance, and the community reinvestment act, the dead hand of state control warps the financial system. Yet in spite of reams of evidence to the contrary most of the public and the commentariat instantly blamed the free market for the crisis.

In his new book Dr. Brook asks the question, why?

We know that Capitalism and freedom work. Capitalism, as far as it is allowed to operate free of government interference, raises the standards of living for all people; it wipes out disease, hunger, and poverty and allows us to live our lives according to our tastes and preferences, not those of kings, aristocrats or politicians.

Yet despite all of the historical evidence, and despite the work of brilliant economists, the people of the western world continue to reject many aspects of Capitalism. Dr. Brook and Don Watkins in their book provide an answer.

People are not moved solely by facts and evidence. If this were the case we would have worldwide free trade and an end to burdensome regulation and taxes. People are moved to support or oppose policies and ideas due to the emotions which are the consequence of their philosophy. This philosophy may not have been consciously identified and thought through by the individual but it informs their attitudes to capitalism and free markets.

Capitalism is fundamentally based on self-interest. Many people went to go and see the movie Skyfall. It should be an uncontroversial statement that most people went to watch this movie because they believed they would enjoy this movie rather than the fact they wanted to stimulate the economy or make sure those who worked in cinemas had jobs.

We trade with each other in order to make our lives better not primarily to make the lives of other people better. Yet most moral philosophies in our culture do not view self-interest as positively good.

Instead what most of us our taught is that the highest moral good is to think of others before ourselves, that the interest of a collective group outweighs our individual interests. This is a morality which is fundamentally incompatible with capitalism. When we trade we engage in a win-win transaction; when we sacrifice we are engaged in lose-win transaction.

Dr. Brook explores our culture’s moral attitude via Bill Gates. Before Gates was giving vast amounts of money away to charity the popular attitude towards him was one that generally considered him to be greedy and earning too much money. Yet Gates is now widely viewed as a morally admirable figure, not for what he did at Microsoft – changing the world, realising his vision, and in the process benefitting almost everyone on the planet – but for giving his money away.

A moral culture which regards making money for oneself as neutral or even bad may be compatible with other systems such as communism but it is in complete opposition to the very foundations of capitalism. Ayn Rand’s philosophy demonstrates to us that pursuing our own happiness and wellbeing before those of others is not only acceptable but in fact virtuous. Indeed why is the happiness of others more important than your own?

Critics of Rand often misunderstand her views of selfishness. Rand does not mean to say that one ought to be selfish by lying, cheating and stealing in order to fulfill whatever whim or desire. Rand specifically rejects this as a false sense of selfishness, or rather self-destructive. What Rand means is pursuing our long term rational self-interest properly understood.

Once we view selfishness in this light we understand that an action like stealing money from your friends to buy crystal meth is not selfish but self-destructive. But when you view your own life and happiness as your highest value, and reject that you must sacrifice your happiness to that of others, you can live your life free of the unearned guilt that philosophers throughout the ages have attempted to thrust upon humanity.

Our self-interest is not measured purely in terms of money. People are values to us. This is why spending your money on healthcare for a loved one is no sacrifice. But if the government confiscates large amounts of your money to pay for the healthcare of others to the detriment of your family, that is morally unacceptable. Crucially, it is also destructive to a free market economy.

A society whose moral code is based on ethical egoism is not one in which all men are islands; rather your own life and that of everyone else is enhanced due to the fact that our interactions are voluntary and both sides win in all areas of life, from commerce to friendship to love.

If advocates of free markets are ever going to win this battle they must realise that this fight goes deeper than whether a low tax economy is better for growth or whether abolishing a central bank will help prevent massive recessions.

If we are to have a free market revolution our culture and society will need a moral revolution. As well as being an indispensable guide to the facts over the financial crisis and other major policy areas, Dr. Brook and Don Watkin’s book shows how Ayn Rand’s ideas can change the course the western world has been on – from bankruptcy and serfdom to a society that is free, prosperous and moral.

Guy Bentley is a Libertarian blogger and a former editorial assistant at the Commentator